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28 terms

Ch. 14 Developing and Pricing goods and services

Vocab!!!!
STUDY
PLAY
Value
Good quality at a fair price
Total Product Offer
Everything that consumers evaluate when deciding whether to buy something. (aka Value Package)
Product Line
A group of products that are physically similar or are intended for a similar market.
Product Mix
Combo. of product lines offered by a manufacturer.
Product Differentiation
Creation of real or perceived product differences
convenience goods and services
Products that the consumer wants to purchase frequently and with minimum effort.
Examples: Candy, gum, milk, snacks, gas, etc.
Shopping goods and services
Products that the consumer buys only after comparing value, quality, price and style from a variety of sellers.
Examples: clothes, appliances, electronics, auto repair, etc.
Specialty goods and services
consumer products with unique characteristics and brand identity. Products are perceived to have no other substitute and consumer will put forth effort to get these products.
Examples: Fine watches, Wines, Imported chocolates, services, etc.
Unsought goods and services
products that consumers are unaware of, haven't necessarily thought of buying, or find they need to solve an unexpected problem.
Examples: Car towing, funeral services, insurance, etc.
Industrial Goods
Products used in the production of other products. (aka B2B products).
Bundling
grouping two or more products together and pricing them as a unit.
Trademark
brand that has exclusive legal protection for both it's brand name and it's design.
Brand Equity
The value of the brand name and associated symbols
Brand Loyalty
The degree to which customers are satisfied and are further committed to future purchases of that brand.
Brand Awareness
How quickly a given brand name comes to mind when a product is mentioned.
Brand Association
Linking of a brand to other favorable images
Brand Manager
Manger who has direct responsibility for one brand or one product line. (aka product manager)
Product Screening
Process designed to reduce the number of new product ideas being worked on at any one time.
Product analysis
making cost estimates and sales forecasts to get a feeling for profitability of new-product ideas.
Concept testing
taking a product idea to consumers to test their reactions.
commercialization
promoting a product to distributors and retailers to get wide distribution and developing strong ads and sales campaigns to generate and maintain interest in the product among distributors and consumers.
Product life cycle
A theoretical model of what happens to sales and profits for a product class over time.
Four stages:
1. Introduction
2. Growth
3. Maturity
4. Decline
Target Costing
designing a product so that it satisfies customers and meets profit margins desired by the firm.
competition based pricing
A pricing strategy based on what all the other competitors are doing.
Price Leadership
Strategy by which one or more dominant firms set pricing practices all competitors in an industry follow.
Break Even Analysis
Process used to determine profitability at various levels of sales.

BEP= Total Fixed Costs/ Price of one unit - Variable costs of one unit.
Total Fixed Costs
All expenses that remain the same no matter how many products are made or sold.
Variable costs
Costs that change according to the level of production.